Table of Contents

The Anatomy of Indian Rural Market
Supriya Jha, India
Abstract
The Indian established Industries have the advantages,
which MNC don‘t enjoy in this regard .The strong Indian
brands have strong brand equity , consumer demand-pull
and efficient and dedicated dealer network which have been
created over a period of time. The rural market has a grip of
strong country shops, which affect the sale of various
products in rural market. The companies are trying to trigger
growth in rural areas. They are identifying the fact that rural
people are now in the better position with disposable income.
The low rate finance availability has also increased the
affordability of purchasing the costly products by the rural
people. Marketer should understand the price sensitivity of a
consumer in a rural area. This paper therefore is an attempt
to understand the rural market.
Key Words: poverty line, rural potential, social
indicators, challenges, solution
Introduction
―India‘s way is not Europe‘s. India is not Calcutta and
Bombay. India lives
in her seven hundred thousand
villages.‖....................Mahatma Gandhi, 1926
The rural population in India accounts for around 627
million, which is exactly 74.3 percent of the total population.
Of this, 90% were concentrated in villages with population
less than 2000. The rural India is home to 715 million or 12
percent of the world‘s population. This segment, commonly
referred to as the ‗bottom of pyramid‘, presents a huge
opportunity for companies.
According to a study conducted in 2001 by the National
Council for Applied Economic Research (NCAER), there
were as many ―middle income and above‖ households in
rural areas as there were in urban areas. There was almost
twice as many ―lower income household‖ in rural areas as in
urban areas. There were 2.3 million ―highest income‖
households in urban areas as against 1.6 million in rural
areas. The Union Budget for 2010-11 has hiked the
allocation under the National Rural Employment Guarantee
Act (NREGA) to US$ 8.71 billion in 2010-11, giving a
boost to the rural economy. Gone were the days when a
rural consumer had to go to a nearby town or city to buy a
branded product. The growing power of the rural consumer
was forcing big companies to flock to rural markets. At the
same time, they also threw up major challenges for
marketers. Nirma's success demonstrated that rural India did
have the money and willingness to buy packaged goods.
Some of the important features or characteristics of Rural
Marketing in India Economy are:
•With the initiation of various rural development programs
there have been an upsurge of employment opportunities for
the rural poor. One of the biggest cause behind the steady
growth of rural market is that it is not exploited and also yet
to be explored.
•The rural market in India is vast and scattered and offers a
plethora of opportunities in comparison to the urban sector.
It covers the maximum population and regions and thereby,
the maximum number of consumers.
•The social status of the rural regions is precarious as the
income level and literacy is extremely low along with the
range of traditional values and superstitious beliefs that have
always been a major impediment in the progression of this
sector.
•The step taken by the Government of India to initiate
proper irrigation, infrastructural developments, prevention
of flood, grants for fertilizers, and various schemes to cut
down the poverty line have improved the condition of the
rural masses.
We can see that, there is hardly any Gap between Rural &
Urban India in terms of the Rich. There are over one lakh
villages with 2,000 population, while there are only 2,300
towns with 20,000 or more population.
Rural marketing in Indian economy can be classified under
two broad categories. These are:
• The market for consumer goods that comprise of of
both durable and non- durable goods.
• The market for agricultural inputs that include
fertilizers, pesticides, seeds, and so on.
Some Impressive facts about the Rural Sector,
• In the year 2001-2002, LIC sold 55% of its policy
in rural area.
• Of 2 million mobile connections, 50% are in
small/towns and villages.
• Of the six lakh villages, 5.22 lakh have a Village
Public Telephone (VPT)
• 41 million Kisan Credit Cards issued ( against 22
million credit plus debit cards in urban) with cumulative
credit of 977 billion resulting in tremendous liquidity.
What is changing in the rural market
1.Infrastructure
2.Disposable Income
3.Media penetration
4.Aspiration
As part of its financial inclusion programme, Syndicate
Bank has opened 24 new branches in the villages allotted in
24 days. The bank has been given a target of 1,620 villages
by March 2012 and 3,270 villages by March 2013.
Climbing Social Indicators-
Between 1981 to 2001-
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